PROVINCETOWN — The latest effort to create middle-income housing here underwent a major revision this month when the select board endorsed a change in plans for a new 40-unit building at the site of the town’s former police station at 26 Shank Painter Road.
Instead of creating 40 deed-restricted year-round units that would rent for $2,175 to $3,850 per month, developers Christine Barker and M. Tatiana Eck now propose a building with 40 condos. Thirty of them would sell for below-market rates at prices approved by the select board, according to the revised plan.
Ten of the condos would sell for less than $400,000, nine would sell for less than $500,000, and 11 more would sell for less than $700,000, Barker and Eck told the board on Dec. 9. The median price for a condo in Provincetown is currently $806,000, according to a housing needs assessment conducted this year by the UMass Donohue Institute.
The town would contribute $4 million to the developers’ $19.8-million project along with 0.4 acres where the old police station currently stands.
The select board was enthusiastic about the change from rental units to ownership units, although there were questions about how the sale of the units would be managed.
“People are going to want to know who is eligible to live in these units, beyond just the income limits for each unit,” said board member Erik Borg.
The 30 below-market units would have deed restrictions that would require them to be the sole domiciles of their owners, prohibit short-term rentals, and prevent the resale prices of the units from accelerating at market rates. Instead, the resale prices would be determined by a formula tied to median income in Barnstable County.
The town would hold the deed restrictions, which would be similar to those of the “affordable ownership” units created by its inclusionary bylaw.
“The units created through inclusionary zoning have a lot of very specific processes, including the town being assigned to conduct the lottery” for the units, said select board member Austin Miller. Comparing the new project to those units is what “helped me to get my head around” this project, Miller said.
When it comes to setting the rules for the lottery, “the town has a lot of discretion in terms of the lottery qualifications,” said Town Manager Alex Morse.
State funding, and the eligibility rules that come with it, generally exists only for units that are earmarked for people earning 80 percent of the area median income or less, and there are only four such units in Barker and Eck’s new proposal.
That means the town is likely to be the only government entity subsidizing the developers’ investment in the majority of the below-market units. And as a result, the town will have significant freedom in designing the lottery rules, Morse said — including by favoring Provincetown residents or town employees, people who work in town, or people who are active in its civic or artistic life, as the town already does in its Lease to Locals program.
Dedicating a large number of units for middle-income earners “is something that people have been trying to figure out how to do,” said board member Leslie Sandberg. Barker and Eck’s building, which they are calling the Bellwether, “is going to be the first of its kind on the Cape,” Sandberg said.
The 10 units under $400,000 would have income limits ranging up to 130 percent of the area median income, which is $111,657 for a single person or $127,608 for a couple, according to Barker and Eck’s presentation.
The next nine units, which would sell for between $400,000 and $500,000, would have income limits ranging up to 180 percent of area median income: $154,602 for a single person or $176,688 for a couple.
The last 11 units, which would sell for between $575,000 and $675,000, would have income limits ranging up to 245 percent of area median income: $210,430 for a single person or $240,492 for a couple.
The income limits help define both the initial sale and resale price for the units, Miller said. Applicants would not need to earn the upper limit to qualify for the lottery; “it’s just that they can’t make more than that,” said board chair Dave Abramson.
“We’ve seen with the housing lotteries that a lot of people can qualify for loans,” said Abramson. In July, 27 households applied for the town’s affordable ownership lottery for a $189,685 one-bedroom condo at 50 Nelson Ave., and 25 of them met all of the criteria for the lottery, including a pre-qualification letter from a mortgage lender.
Needs Assessment
At the outset of her presentation, Barker cited the high demand for that unit at 50 Nelson Ave. and the town’s new housing needs assessment, conducted by the Donohue Institute, as reasons for changing the plan from building 40 units of year-round rental apartments to condominiums with 10 market-rate units and 30 below-market units.
“One of the interesting conclusions of that study was that people who are housing insecure fall across multiple income levels, not just the lower income level,” Barker said. “Twenty-nine percent of those who responded as ‘housing insecure’ are in the ‘missing middle’: 100 percent to 200 percent of area median income.”
About a third of the 1,446 people who responded to Provincetown’s housing survey are defined as housing insecure, which means they have trouble paying their rent or mortgage, are worried they might have to move in the next 12 months, or have moved twice in the past two years.
Among the 297 renters who answered the survey, however, 70 percent are housing insecure. Of the 69 town employees who took the survey, nearly two-thirds were housing insecure, and of the 243 service industry workers, 61 percent were housing insecure.
The Donohue Institute also found that a household income of $76,000 is required to be able to make market-rate rents in town, assuming that a potential tenant can find an empty unit to begin with.
The average wage in Provincetown’s three largest industries — hospitality, retail, and health care and social assistance — is not high enough for most workers to afford market-rate rents unless there are two or more earners in a household, the needs assessment found.
There is also no clear preference for rental housing or homeownership units among Provincetown’s housing insecure population, according to the assessment. Of the 408 full-time town residents who said they would be interested in moving into town-sponsored housing, 20 percent said they were only interested in ownership units, while 23 percent said they were only interested in rental units. The other 57 percent — 231 full-time residents — were open to either possibility.
